## Facts

- A Minneapolis property was subdivided into two parcels: an apartment-building parcel and an office-building/parking-lot parcel.
- A declaration created an easement granting the apartment parcel use of eight parking spaces in the adjacent parking lot to satisfy a lender’s financing condition for the apartment parcel.
- The apartment parcel was mortgaged to a lender that required the parking easement as part of its loan security.
- The same owner later acquired fee title to the office-building/parking-lot parcel, uniting fee title to both the dominant and servient estates.
- The office/parking parcel was later conveyed to third parties, ultimately to Loring Properties, Ltd.; various later documents sometimes referenced the former easement, and title insurance noted it, though the chain of conveyances did not consistently include it.
- The apartment parcel was later sold to Pergament; by that time, the original mortgage on the apartment parcel was paid off.
- After discovering the easement language in his deed, Pergament demanded eight designated spaces from Loring, which Loring refused.
- Pergament sued for declaratory relief to enforce the claimed parking easement; the district court granted summary judgment for Pergament, and the court of appeals affirmed.

## Issues

1. Whether an easement is extinguished when fee title to the dominant and servient estates becomes united in the same owner under the merger doctrine.
2. Whether a mortgage on the dominant estate prevents extinguishment of the easement for the fee owner and the fee owner’s successors (the “mortgage exception” to merger).
3. Whether an easement extinguished by merger is revived by later deed references to the easement.

## Decision

- The Minnesota Supreme Court reversed.
- The easement was extinguished by merger when one owner held fee title to both dominant and servient estates.
- The mortgage exception preserved the easement only for the benefit of the dominant-estate mortgagee, and only if the mortgagee’s interest became possessory; it did not preserve the easement for the fee owner or later fee owners.
- Later references to the extinguished easement in deeds did not revive it.
- Pergament, as a successor fee owner after the dominant mortgage was satisfied, had no enforceable easement against Loring.

## Legal Principles

- When fee title to dominant and servient estates unites in the same owner, the easement is extinguished as to that owner and the owner’s successors in interest.
- A “mortgage exception” to merger protects only the dominant-estate mortgagee’s security interest; the mortgagee may claim the easement if the mortgagee’s interest becomes possessory.
- An easement extinguished by merger is not revived by a later deed’s recital or reference; revival requires a new, legally effective creation or grant.

## Conclusion

The court held that the parking easement terminated when the parcels came under common fee ownership, and the only surviving protection was for the dominant mortgagee during the life of its mortgage; once that mortgage was satisfied, later deed references could not restore the easement for a subsequent purchaser.


Pergament v. Loring Props., Ltd., 599 N.W.2d 146 (Minn. 1999)